The average daily balance of bank lending rose 0.1 percent in November from a year earlier, the slowest growth since December 2007, reflecting companies' sluggish demand for borrowing money for capital investment and operations amid the stagnant economy, the Bank of Japan said Tuesday.
The loan balance managed to increase for the 46th straight month to ¥400.51 trillion, but the pace of increase slowed for the 11th consecutive month and marked a sharp slowdown compared with the previous month's rise of 1.5 percent.
After adjustment for special factors — loan securitization, exchange-rate fluctuations and the allocation of loan-loss reserves — the loan balance rose 0.5 percent.
By type of financial institution before adjustment, the loan balance at city banks and trust banks fell 1.3 percent to ¥207.79 trillion, marking the first drop since April 2008.
In contrast, the balance at first- and second-tier regional banks rose 1.7 percent to ¥192.72 trillion and the balance at small cooperative financial institutions known as "shinkin" banks increased 0.8 percent to ¥63.25 trillion.
The combined balance of bank loans gained 0.2 percent to ¥463.76 trillion.